Who runs Spokane? 03/03/99

Anybody who has lived in Spokane very long knows what we're talking about when we refer to "the establishment, " "the elite " or the "downtown power structure. " Whatever you call it, there's a strong perception that the streets of downtown are the Monopoly board for a handful of wealthy citizens. An intriguing theory, but proving the existence of a downtown power structure is not easy.

Terry Novak, who was right in the middle of it all as Spokane City Manager for 13 years, discounts the notion, saying real changes come from places you'd never expect, not a handful of movers and shakers.

"Things like Bloomsday, Hoopfest, the Children's Museum, they literally bubble up through the citizens, " says Novak. "These are not things that get dreamt up by a chamber of commerce, and I think there's a sort of magic about that. "

Still, significant changes in the recent past suggest that a pattern of influence, however difficult to trace, does exist separate from any "bubbling up " that might occur.

Most recently, the Joint Center for Higher Education was disbanded by the governor, resulting in the shipping of decision-making for Spokane's downtown higher ed campus from Spokane to Pullman (not to mention the deed for the 50 acres it sits on). Key players in that move have admitted that a pivotal meeting in the process was held at the members-only Spokane Club -- without inviting all the interested parties to attend.

A few years before that, a proposal came forth to locate a branch of the Pacific Science Center in Riverfront Park. While few argued the positive impact a science center could have on downtown, some wondered why only one site was offered and, if Riverfront Park was to become open for such uses, why a request for proposals never went out to other organizations. With no answers to such questions, the subsequent public vote failed.

And a few years before that, the Spokane Public Library was located on a site one downtowner described as "easily accessible -- by helicopter. " As is common with similar projects, a public oversight process was undertaken. But, again as with other such projects, even members of the oversight committee have since admitted to not being quite sure how the site was finally chosen.

Still, while it may seem that some pattern of influence exists, you could argue that WSU operating the Spokane campus makes sense, that a science center would have been a a big plus and that the new library, isolated as it is, is better than the old one. So the question follows: As long as the downtown power structure stands for progress, what's the problem?

Local historian John Fahey, who says Expo '74 is the downtown power structure's finest hour, says there isn't a problem: "We talk about the power structure as if it's evil, but it's been benevolent over the years. Obviously, the structure has always served its own interests, but by and large it's been benevolent. "

Okay, but what if you don't agree with the WSU decision, or, say, start a petition drive to put the science center proposal to a vote? -- which is just what Steve Corker did. As the advertising executive representing Riverfront Park, he felt it was his duty to represent the interests of the park in the matter and create a debate where none was wanted.

"I was really naive, " says Corker, now a radio talk show host. "I figured you agree to disagree, but the reaction was 'You're not a team player, and therefore we're going to punish you.' "

Corker says tht as a result of his stand, he not only lost the Riverfront Park account but also the Spokane Interstate Fair. The final irony is that time has proven Corker right. Today the Park Board is again recommending Spokane try to locate a science museum, this time on the north bank of the Spokane River. The site Corker fought against has apparently been determined not to be suitable for such a facility after all.

B a d B a b b i t t u d e

Fahey, who says the power structure has been around for as long as people have owned property along the banks of the Spokane River, does add a simple, but crucial, caveat to his statement of the benevolence of the power structure: "It's not benevolent to the single guy who tries to oppose it; he gets shoveled aside pretty quick. "

So what kind of a citizenry does such a chilling climate create? It seems uncomfortably close to the frighteningly homogeneous, exclusively materialistic world created by Sinclair Lewis in his novel Babbitt. Another glimpse came a few years ago when downtowners took to wearing prominent "I Love Downtown " pins on their lapels, well-meaning, of course, but cliquish to a degree reminiscent of high school.

Robert Herold, a commentator on downtown issues for The Inlander and KPBX, says there is actually a sizable body of research on the question of power and influence in communities. One of the more pertinent findings as to how such patterns of influence affect communities is the tendency for people to want to defer to, rather than question, authority.

"Let's face it, " says Herold, "nobody wants to go down to the Spokane Club and be snubbed because they took issue with something. "

Herold says in a community where the power structure's benevolence is empowered by the common knowledge of what can happen if you don't agree, politics has to become a dirty word. And if politics -- the highest calling in life to the ancient Greeks -- are off limits, how does a community work out solutions? Herold says in Spokane's case, 100-plus years of oligarchy has created a citizenry that is publicly cowed and privately cynical, a city council that is more comfortable letting decisions get made by bureaucrats and a city that ultimately can't deal with its challenges in an effective way.

Implicit in the entire arrangement is that the people in power have the answers. If people are willing to defer to authority rather than challenge it, they must believe that authority to be not only benevolent, but also wise.

And sometimes the downtown power structure ventures out from its real estate deals to use that wisdom to help solve community-wide problems, like economic development. But those efforts have been a mixed bag, perhaps revealing the fallibility of the establishment. For the second time in two decades, Spokane appears to be missing out on a historic economic boom that is sweeping other parts of the country.

t h e b a i l e y t e s t

Obviously the economic development challenge in Spokane is complex -- the equation of every city wanting high paying jobs and every employer wanting low paid workers does not add up for any city. It's a tricky situation that seems to be revealing the truth that those who have traditionally been looked to for answers are stumped, too.

So is it possible that the power structure is like a salmon at the dam, disoriented because the old ways of doing things are not working anymore? And the challenges just seem to be getting bigger and more complicated all the time. In the past 20 years, several locally controlled banks have been gobbled up by chains with management in San Francisco or New York. The downtown retail landscape, with the addition and expansion of malls and on-line shopping, is as competitive as it's ever been. And the final and perhaps biggest threat comes from the possibility of downtown being ignored to death by businesses out in the county (mega stores) or on the edges of downtown (Walt Worthy's vast office space empire) who pay no attention to the Monopoly game and instead simply steal customers by doing it better.

And if that's not bad enough, political power may be slipping away, too. Not only is the city's nearly 40-year run of downtown-friendly councils endangered by three open seats this fall, but changes to the structure of local government -- district representation, strong mayor -- could also appear on the ballot.

Just as the possibility of the power structure's demise seems somewhat palpable, it becomes a good time to apply the George Bailey test. George Bailey was the hero of Frank Capra's It's a Wonderful Life, which ponders what Bedford Falls would have been like without George's lifetime contribution. Applied to Spokane, no one can deny the contribution made by those who have made their fortunes here. Without such entrepreneurs, we'd have never built our luxurious system of parks or seen such support for a lively arts scene, from the Symphony to the theater to the museum. And without a downtown power structure, Spokane would never have become the smallest city ever to host a world's fair or be in the enviable position of having strong retail anchors in downtown while many cities have lost them for good.

Looking in the mirror this way is a good exercise, and, real or not, a good chunk of Spokane feels ruled by a modern brand of enlightened despotism. To find out who populates this ethereal so-called power structure, read on...

Spokane's first family: The Cowles clan

"It is right and proper that the public should know that the publisher of The Spokesman-Review, over a long range of many years, has held firmly to a policy and practice of refraining from any investment that might give even an appearance of personal interest that was in conflict with or apart from the broad general interest and welfare of all the people... It is reasonable to assume that ownership of real estate in Spokane and a newspaper whose success is dependent on the general prosperity of all the people is a guarantee that The Spokesman-Review will advocate only those measures that are of benefit to Spokane and the Inland Empire. "

-- W. H. Cowles; November, 1915

Unlike the mining fortunes that were made and lost in the Inland Northwest, and the names that went with them, Spokane's Cowles family has distinguished itself from the very beginning by thriving on the ups and downs of the local economy. And along the way, they built an empire.

But while the story of the Cowles is a case study in the American Dream, they've harbored a built-in conflict of interest from the very beginning, as evidenced by W. H. Cowles' clarification above, which he felt compelled to write after a particularly bitter political campaign season. As a result of sticking to their guns and believing they can develop real estate and run a newspaper without a conflict of interest, Spokane has clearly benefited. But the family has also become a polarizing force as a result: like Bill Clinton, you either trust 'em or you don't.

The family's role in the development of Spokane is little understood because they value and protect their privacy -- even to the point of deflecting credit. But they still haven't been able to hide their influence.

"There's no question, the Cowles people have always been part of any power structure there has been, " says Spokane historian John Fahey, who thinks the benefits of their presence outweigh any conflicts of interest. "If you're going to put your money to work, and you're going to build a city, where else are you going to invest? "

But how they helped build the city may be little understood because over the years they haven't allowed themselves to become the subject of their newspapers' columns -- and due to the work of old W. H. Cowles, theirs were the only newspapers around most of the time.

From the day the first Cowles set foot in Spokane, the family history reads like Horatio Alger on steroids -- to put it mildly, William H. Cowles had a knack for empire-building. When the 24-year-old newspaper reporter with a Yale law degree got off the train from Chicago in 1891 with a slight limp (a train accident at age 11 left him relying on an artificial leg), all he was probably thinking about was Horace Greeley's famous "Go West, young man " admonition -- voiced only three decades before. But varying a bit from a typical Alger storyline, Cowles came from good stock: he was the second son of the Chicago Tribune's business manager; his uncle was in the room when the Republican party was created. His father Alfred had just died in 1889, and it was his inheritance as much as his newspapering skill that landed him in Spokane.

In 1891, the struggle for newspaper dominance was being waged in Spokane, and two Tribune reporters had already left for The Spokesman, a Republican paper just started to compete with the Democratic, Portland-controlled Review. Cowles joined The Spokesman, and his infusion of cash allowed the battle to continue. Only a few months later, The Review put more pressure on The Spokesman by opening its new tower, which still stands today. It wasn't long, however, until the war began to cost too much, and the sides agreed to team up. Thus Cowles, a personal friend of then-Republican Theodore Roosevelt, became a part owner of The Review.

Also in that year, 1893, a national depression hit, creating tight finances everywhere. As a result, William H. Cowles was able to buy out his Portland partner and rename his publication The Spokesman-Review.

In 1897, Cowles bought the Chronicle, the city's evening paper. And since then, the family has controlled the local newspaper landscape. Depending on how you looked at it, it was either an admirable feat of empire building or an unhealthy trend toward monopoly, as Time magazine pointed out in 1952 when it gave notice to the release of the official Spokesman-Reviewhistory, News For An Empire by Ralph Dyar. "Dyar gilds The Review, " wrote Time, "but in doing it, he also unintentionally presents a case history of how a well-run newspaper can monopolize a city and dominate a sprawling region. "

In those days, no one questioned a crusading newspaper, and The Spokesman-Review had its crusades, some enduring, others embarrassing. The senior Cowles -- and his newspapers -- were instrumental in the city-wide beautification process undertaken by Aubrey White. Those efforts resulted in parks from Manito to Liberty to Audubon. But later, in the fight over cleaning up the Spokane River, which ran as an open sewer for decades, The Spokesman-Review opposed a sewage treatment plant in its columns for 20 years.

W.H. Cowles ran the operation until 1946, when his son William, Jr., took control. The senior Cowles' plans to have his two sons split duties ended tragically when Cheney Cowles was killed on a training flight during World War II. William, Jr., did exhibit his father's knack for growth, however, in purchasing the KHQ television broadcasting station. William, Jr., also continued the family practice of buying real estate. Just as his father had speculated in residential lots in the city, William, Jr., laid the foundation for years of newspapering by buying large stands of timberland throughout the West along with more commercial property in the city.

And the hold on the local market only tightened. By the 1930s, the two newspapers' advertising sales staffs were combined, and by the 1970s it was estimated that Cowles took in as much as 80 percent of the local advertising dollars. To break up the perceived monopoly, the U.S. Department of Justice attempted to take the Cowles' KHQ broadcasting license away because their ownership of it was "repugnant to antitrust principles, inimical to rather than promotive of public interest. " The family managed to fend off the challenges and continues to own KHQ.

The next generation came into power just before the world's fair was coming to town, and while William "Bill " Cowles, III, took control of the newspaper, his younger brother Jim quietly went to work in the effort to make Expo happen. Both were successful; Bill has been credited for bringing the family's newspapers into the 20th century, and Jim, with little fanfare, was almost solely responsible for convincing the railroads to remove themselves from the riverside property needed for the Expo grounds, and later Riverfront Park. During this time, the family's downtown property was developed, with the addition of a parking structure over Post Street, Nordstrom and other specialty shops, all in time for Expo.

By the '90s, the fourth generation of Cowles was ready to jump into the family business, although it wasn't under ideal circumstances. Bill Cowles passed away unexpectedly, and like his great grandfather, Stacey Cowles had to assume control of the newspaper at an early age. A few years later, Elizabeth "Betsy " Cowles moved back to Spokane, leaving a law practice in Seattle to assume control of the family's real estate and broadcasting properties.

The family has always been and continues to be well connected in media circles outside Spokane, having long held a sizable chunk of Chicago Tribune stock. Most recently, Bill Cowles' widow Allison married Arthur Sulzberger, past publisher of the New York Times.

It's a history that has been extremely rewarding for the Cowles family, now among the nation's wealthiest. But as one of the region's largest employers and most generous contributors to the arts, it's also been good in many ways for Spokane. So how do you account for the palpable pocket of resentment toward them? Sure, there are some people who just don't trust the rich, but beyond that it may have to do with a feeling that by controlling the information in a community for so long, the Cowles' newspapers succeeded in keeping Spokane conservative, stodgy and, well, boring. Something besides low-paying jobs has to account for the local brain drain -- the flow of Spokane's best and brightest young people to Portland and Seattle.

It's a theory fed by the mystery that has always surrounded the family, which has always guarded its privacy and tried to maintain a low profile. For example, W.H. Cowles had famed architect Kirtland Cutter design him a comfortable but modest bungalow in Browne's Addition, but the winter home he had built in Santa Barbara was a castle.

But things are not so simple anymore. Slowly, the family has had to shed its privacy, starting with Bill Cowles and up to today with Betsy Cowles clearly leading the River Park Square project. In an age of celebrity, the Cowles have the local franchise, and they are starting to acknowledge the community's interest -- even Allison allowed a portrait and story to appear in the newspaper when she remarried.

Stacey Cowles says becoming more public people has been a transition for his family, but that it was never in question: "There aren't too many locally owned and operated companies here anymore, and it's increasingly important for those who have that kind of stake to get things going. We recognize that sometimes we are the 800-pound gorilla, and we can take some abuse. But we have to have a thick skin and do what we think is right, because, in the end, what we do is going to make a huge difference. "

The family is also out of its comfort zone in looking for assistance on a project they say only pencils out with a public component. Nonetheless, River Park Square may be one of only a few times the family has borrowed money for anything, which is perhaps a function of how complex the family business has become: what could have been done with a handshake and a few signatures at the turn of the century now takes a team of lawyers and consultants three years to put together. And the issues surrounding proper use of public money and what constitutes "general prosperity of all the people, " as W. H. Cowles put it, clearly reside in that margin of gray that has grown to a chasm since the good old days of black and white.

But it comes back to a newspaper family engaging in real estate development. While partisan crusades were accepted, perhaps expected, back before World War II, those days are clearly gone, as journalism has aspired to become more professional and analytical. And as ethical standards for journalists have risen, expectations of media have similarly risen to the point where running both a real estate development company -- especially one that has partnered up with local government -- and a newspaper may become unmanageable. It's a question that was put to a national audience earlier this year by The Wall Street Journal.

It might be different if The Spokesman-Review were aggressively covering the story, but holding true to historic form, the newspaper has been unwilling to dig into its owners' doings.

The Wall Street Journal also revealed a strong sense that members of the Cowles family feel underappreciated for all their efforts to help save downtown. It's indicative of the family's damned if you do, damned if you don't position.

Bill Stimson, a reporter for The Spokane Daily Chronicle in the early-1970s, remembers seeing Bill Cowles speak at a Society of Professional Journalists luncheon, an event that was notable because Cowles family members rarely spoke in public. At that time, as now, there was controversy swirling around the family's downtown commercial property.

"Bill Cowles stood up and said, 'Yes, we built these buildings, and that garage. Yes, we did these things, and yes we own the newspaper. These things seemed to need doing, and I was in a position to do it, so I did it.'

"No one could really argue that downtown wasn't better for the improvements they made, " Stimson continues. "People don't want to give them the credit they deserve for helping this city, but I suppose when people have everything, why should they get credit? I believe the Cowles family has a real sense of noblesse oblige. But the trouble with noblesse oblige is that it comes from noblesse. "

The Fancher Report

There's a document whispered at by the Cowles' conspiracy theorists; it's the Dead Sea Scrolls of Spokane's secret history. It's called "The Fancher Report, " but it's not available in bookstores; you can only get a copy when it arrives in a plain manila envelope, sans return address.

Although it doesn't quite deliver on its buzz, the rambling document does shed some light on the family -- even if it does rely on unnamed sources. It was apparently enough for the thesis committee that signed off for Terence Fancher, a Spokane native and Harvard undergrad in economics. Fancher's thesis, "Cowles Media and Real Estate Empire, " appears to have been inspired by the feud between the Department of Justice and the Cowles. To lend credence to the government's bid to revoke the family's broadcasting license for KHQ-TV, Fancher set out to document how Cowles' media and real estate holdings worked together.

Fancher's findings center on the downtown redevelopment undertaken just prior to Expo, and the 1976 document even charges that the Cowles negotiated a new parking garage and skywalks on false premises. By telling the city council that J.C. Penney's required the skywalks and controversial parking garage, the developers won approval. But Fancher claims he interviewed an official at Penney's who denied that his company ever made such requirements. Fancher also charges that the developers began construction without the necessary permits (coincidentally, the current Cowles' downtown redevelopment nearly ran afoul of HUD regulations for starting construction without having finalized the environmental review process.)

Fancher, now a General Electric executive in Manhattan, ultimately joined the DOJ's motion against KHQ, which led to years of dispute. Through it all, however, the Cowles were able to hold onto their license by convincing the Federal Communications Commission that cross-media ownership in Spokane did not create a monopoly.

Friends of the family

Over the years, the Cowles family has worked closely with a number of advisers in managing its growing list of business interests. But none compares to William Hyde, the family's closest confidant for more than 40 years -- and a unanimous selection to the downtown power structure hall of fame.

Hyde, who started working for W.H. Cowles, was the perfect foil to William Cowles, Jr. Intentionally or not, the pair ran a kind of good cop, bad cop routine for years, in which Cowles killed them with kindness and Hyde put the hammer down when necessary. But those who remember him say if you had Hyde on your side, you couldn't doubt his resolve to succeed. But if he wasn't on your side, good luck. Fortunately for downtown, late in his life, Hyde supported plans for a world's fair in Spokane and went on to play a major role along with Jim Cowles in the effort to make it happen.

While previous advisers have faded into history, and subsequent advisers have tried to fill his shoes, if the legends are true, none has matched Hyde's willingness to do whatever it took to make things happen.

Today's group of key advisers include people inside Cowles Publishing, like Shaun Higgins, director of marketing for The Spokesman-Review, and Editor Chris Peck. While Higgins seems to be carrying on the tradition started by Bill Cowles to keep the newspaper as up to date as possible, some are charging that Peck is carrying on an older tradition -- crusading in the newspaper. Not all the time, but frequently enough to be noticed, Peck has penned editorials supporting the downtown efforts of his employers. While Peck insists that he has full independence, his boss Stacey Cowles admitted to The Wall Street Journal that he sometimes uses his newspaper to provide "moral support " to his sister Betsy in her downtown revitalization efforts. And a recent front page story on the connection between Mayor John Talbott and local businessman Paul Sandifur raised questions about whether the newspaper was being used to further the family's political agenda -- a question that looms even larger when one considers the veritable hotline Bill Hyde enjoyed for years between his office and City Hall.

On the legal front, the Cowles rely on the same law firm they have used since the very beginning, Witherspoon Kelley Davenport & amp; Toole. Attorney Duane Swinton is their man today, and he represents the family in its real estate interests along with the newspaper in its freedom of the press issues -- issues that have strangely intersected in recent weeks with the announcement that the Cowles would seek to depose city officials in an attempt to discover who was responsible for leaking confidential information related to River Park Square to another newspaper, The Wall Street Journal.

And in representing the Cowles in management of their real estate is Bob Robideaux of R. W. Robideaux and Co. -- the key man working on the $100 million renovation of the family's downtown River Park Square property. Robideaux reportedly rankled some in handling the eviction of tenants during the renovation, but the list of new tenants secured by his company and other consultants on the project has been exciting enough to drown out complaints. Besides, those relocated businesses qualified for HUD money for their trouble -- but only after HUD reminded Robideaux and the Cowles to share that information with those tenants.

The outsiders: new blood or naysayers?

Despite the perception that few dare challenge the status quo when it comes to plans for downtown, there is a growing chorus of voices that are either questioning what's happening or just doing their own thing in downtown outside the traditional box.

Of those who are raising questions about where downtown -- and therefore the city -- is going and why, attorney Steve Eugster is perhaps most persistent. While Eugster's complaints usually come in the form of lawsuits, like the one challenging the city's proceeding on River Park Square without a vote, they also come in the form of initiatives to change the form of government, like his strong mayor initiative (which he says may appear in November). Eugster says the law is the only way to chip away at the power structure and allow other points of view to be heard.

"The power in the city is this band of brothers at the top, " says Eugster. "They're all trying to protect the decisions that have been made over the past 20 years. "

Eugster says Spokane suffers from tunnel vision, which could be hurting the entire city: "Somehow, the major spending projects keep being focused on downtown. Expanding Riverfront Park, expanding the Convention Center, running light rail to Liberty Lake -- to get any of these things on the table, you need people behind them, and that group of people always seems to be the same, with the same point of view. "

There are plenty of people downtown who, to some degree, share Eugster's concerns but are unwilling to put their name out in public. They are the silent swing voters who helped John Talbott take the mayor's office -- a moment compared to the fall of Rome by some and hailed as the beginning of a new Spokane to others.

In fact, Talbott's pro-little guy candidacy has to mark a turning point of some kind. He questioned the need for the Lincoln Street Bridge and River Park Square's funding mechanism -- issues that other candidates wouldn't touch but that polling proved were near the top of people's lists. While branded a naysayer, Talbott won office; but his tenure to now has been one long lesson in how empty campaign rhetoric can be when the council is stacked against you.

But as pointed out in a recent Spokesman-Review story, Talbott is starting to get support of the non-silent kind in downtown, from, among others, Paul Sandifur, Jr., one of the city's most prominent businessmen.

Another example of outsiders trying to crack the downtown power structure can be seen when new money comes to town. Perhaps most telling is the case of Jeffrey and Ronald Ng, Hong Kong businessmen who bought the Davenport Hotel but have operated at a disadvantage ever since, many say, for being outsiders.

The Ngs already operate one of the world's finest hotels, but they haven't received much support for their plan to make Spokane and the refurbished Davenport Hotel a world class destination, as it was in the early days. The Ngs were first greeted by the revelation that their new property might be a hazardous waste site -- a fact somehow kept from them prior to the purchase. If that wasn't bad enough, Washington Water Power didn't seem interested in cleaning up what they felt at the time was not a big problem. Fortunately, the Friends of the Davenport is loaded with influential people, and after a couple years of negotiations, WWP cleaned up the site to everyone's satisfaction. Nonetheless, many downtowners remain skeptical that the hotel will ever reopen.

Steve Corker, who says the downtown power structure ruined his advertising career because he opposed the Pacific Science Center, says close-mindedness is the biggest problem facing downtown.

"What they did to Dave Sabey [the former NorthTown Mall owner who criticized downtown and was vilified by many for it] is a good example of what shouldn't happen, " says Corker. "Their biggest mistake is to ignore the new wealth. The pie is big enough for everybody, but they haven't brought [the new wealth] in and made them feel a part of the community. "

But even if it appears that a kind of opposition party is forming, it may not be easy for it to provide a coherent alternative vision. Years of being in the minority condition you to be better at criticizing proposals than at providing solutions (reminiscent, some would say, to the Republican takeover of Congress in 1994). It's a problem many supporters of John Talbott see; he's been defined by being against things, rather than for an agenda. And the opposition forces seems infected by a kind of conspiracy-based paranoia all too often. What's lost as a result of such dysfunctional downtown relationships is a basic acknowledgement that, regardless of point of view, all sides are working on the same problem.